VIEW POINT: Greek elections can have domino effect America's future

An EU and a Greek flag fly in front of ancient Parthenon temple, in Athens, Sunday, June 17, 2012, as Greeks voted in the most crucial elections in decades. (AP Photo/Petros Giannakouris)

On June 17, Greeks went to the polls to elect a new government. The stakes were high. Politicians and media sources alike argued the outcome would affect the global economy.

If Greeks voted for parties that accepted the austerity measures, then Greece would continue to be part of the eurozone and Europe itself would be saved. If Greeks decided they had had enough pain and chose to leave the eurozone, then everyone would lose because a Greek exit might upset markets, destroying the already anemic credibility of other weak eurozone members, such as Spain and Italy. Greeks chose to stay in the eurozone, but is the crisis over? And how does this affect the U.S. economy?

The crisis is far from over. The reason is twofold. First, the fact that Greeks voted for parties which promised a solid European future does not necessarily imply that the painful austerity measures will actually be implemented as promised. The country's entire public sector needs to be restructured; power, water, transportation and health need to be fundamentally gutted and rebuilt. One hundred and fifty thousand civil servants have to lose their jobs within the next two years while the rest need to be given completely different incentives to perform more efficiently. And all this has to happen by 2015 under direct supervision by European authorities. It's a tall order to say the least. People have already gone through enough pain; wages have been slashed by 30 percent in some sectors, while the economy is going through its fifth year of recession. It's hard to see a light at the end of the tunnel.

Second, the ability of Greece to save itself depends largely on the larger European economy, which remains and is projected to remain in the red for several more years. Even if Greece were able to achieve the economic competitiveness that it sorely lacks, it needs to find markets for its products. Its main trading partners are other eurozone members.

Greece may be selling, but who will be buying? Germany, the main economic powerhouse in Europe, relies primarily on exports to generate growth. Chancellor Angela Merkel has made it clear she is not interested in stimulating domestic demand.

Other allies such as Spain, Italy and France are in worse condition. Their own banks are in serious trouble; the Spaniards have just bailed out their banks with European money, though they didn't call it that. Italy cannot balance its books, and France wants to stimulate its economy but with someone else's money. All are desperate to sell their own wares, let alone buy from someone else.

If European economies do not improve, Greek efforts will have been in vain. And so far, no one seems to know how to make the economy grow.

This brings us to the U.S. effects. If Europe does not solve its own mess and it continues to wobble economically, America's anemic recovery will be affected. It is no secret that the biggest obstacle to President Barack Obama's re-election is the economy. While better than that of Europe, the economy is simply not producing enough jobs and fast enough for Obama to be assured of victory in November.

In other words, Greece's ability to sort its own mess depends largely on Europe's ability to sort its own mess, which, in turn, threatens to turn the American economy into a mess.

So many things need to go right by so many people in such a short period of time that it is difficult to be optimistic.

Nikolaos Zahariadis is professor of political science in the Department of Government at UAB. Email: nzaharia@uab.edu.